Texas Administrative Code
Title 28 - INSURANCE
Part 1 - TEXAS DEPARTMENT OF INSURANCE
Chapter 21 - TRADE PRACTICES
Subchapter B - ADVERTISING, CERTAIN TRADE PRACTICES, AND SOLICITATION
Division 1 - INSURANCE ADVERTISING
Section 21.113 - Rules Pertaining Specifically to Accident and Health Insurance Advertising and Health Maintenance Organization Advertising
Universal Citation: 28 TX Admin Code § 21.113
Current through Reg. 50, No. 13; March 28, 2025
(a) Coverage details. An invitation to inquire that specifies either the dollar amount of benefit payable or the period of time during which the benefit is payable must contain a provision in effect as follows: "For specific costs and further details of the coverage, including exclusions, any reductions or limitations and the terms under which the policy may be continued in force, see your agent or write to the company."
(b) Illustration of rates. Subject to Insurance Code Chapter 1214, concerning Advertising for Certain Health Benefits, and Insurance Code Chapter 541, Subchapter B, concerning Unfair Methods of Competition and Unfair or Deceptive Acts or Practices Defined, an invitation to inquire concerning a health benefit plan may include rate information without including information about all benefit exclusions and limitations so long as any rate mentioned in any advertisement disseminated under this subsection indicates the age, gender, and geographic location on which that rate is based and so long as the advertisement includes prominent disclaimers clearly indicating that:
(1) the rates are illustrative
only;
(2) a person should not send
money to the issuer of the health benefit plan in response to the
advertisement;
(3) a person cannot
obtain coverage under the health benefit plan until the person completes an
application for coverage; and
(4)
benefit exclusions and limitations may apply to the health benefit
plan.
(c) Identification of policy.
(1) The form number or numbers of
the policy advertised must be clearly identified in an invitation to
contract.
(2) If an advertisement
refers to various benefits that are contained in two or more policies or
riders, but excepting group master policies, the advertisement must disclose
that such benefits are provided only through a combination of such policies or
riders.
(3) An advertisement may
not use the word "plan" without first identifying the subject as an "insurance
plan" or an "HMO plan," as appropriate.
(d) Description of benefits.
(1) An invitation to contract referring to a
dollar amount, a period of time for which a benefit is payable, the cost of the
policy, or a specific policy benefit or the loss for which such benefit is
payable must also disclose those exclusions, reductions, and limitations
affecting the basic provisions of the policy, without which the advertisement
would have the capacity and tendency to mislead or deceive.
(2) If a policy pays varying amounts of
benefits for the same loss occurring under different conditions or pays
benefits only when a loss occurs under certain conditions, any reference to
these benefits in an invitation to contract must be accompanied by a clear and
conspicuous disclosure of the different or limited conditions.
(3) No advertisement may refer to a benefit
payable under a "family group" policy if the full amount of the benefit is not
payable upon the occurrence of the contingency insured against to each member
of the family, unless clear and conspicuous disclosure of such fact is made in
the advertisement.
(4) No
advertisement may be used that represents or implies:
(A) that the condition of the applicant's or
insured's health before, or at the time of issuance of a policy, or thereafter,
will not be considered by the insurer in issuing the policy or in determining
its liability or benefits to be furnished for or in the settlement of a claim
if such is not a fact;
(B) if an
insurer requires a medical examination for a specified policy, the
advertisement, if it is an invitation to contract, must disclose that a medical
examination is required.
(5) An invitation to contract for a policy
that provides coverage for loss due to accident only for a specified period of
time from its effective date must state this fact clearly and
conspicuously.
(6) If any covered
benefits are, by the terms of the policy, limited to a certain age group or are
reduced at a certain age, an invitation to contract must clearly and
conspicuously disclose such fact.
(7) An advertisement may not contain
representations of an aggregate amount payable without clear and conspicuous
disclosure in close proximity to any maximum daily benefit and maximum time
limit.
(8) No advertisement of a
policy providing benefits for which payment is conditioned upon confinement in
a hospital, extended care facility, or at home may advertise that the amount of
the benefit is payable on a monthly or weekly basis if, in fact, the amount of
the benefit payable is based upon a daily pro rata basis relating to the number
of days of confinement unless such statements of monthly or weekly benefit
amounts are followed immediately by equally prominent statements of the benefit
payable on a daily basis. For example, either of the following statements is
acceptable: "$1,000 a Month ($33.33 a Day)" or "$33.33 a Day ($1,000 a Month)."
If the policy contains a limit on the number of days of coverage provided, such
limit must appear in the advertisement.
(9) An advertisement offering assistance or
information concerning Medicare may not state or imply that an obligation is
imposed by the receipt of such information.
(10) An advertisement of benefits payable in
conjunction with Medicare must disclose the Medicare benefits (Part A or B)
they are designed to supplement.
(11) A Medicare-related advertisement must
state in a prominent place the following or similar words: "Not connected with
or endorsed by the United States government or the federal Medicare
program."
(12) References to
Medicare may not be used in such a manner in an advertisement so as to be
misleading or deceptive.
(13)
Advertisements referenced as being "Important Notices" or similar language and
directed primarily to Medicare recipients or senior citizens are presumed to be
misleading or having the capacity or tendency to mislead unless shown
otherwise.
(14) The words,
numerals, and phrases "all," "100%," "full," "complete," "comprehensive,"
"unlimited," "up to," "as high as," "this policy will pay your hospital and
surgical bills," or "this policy will replace your income," or similar words,
numerals, and phrases may not be used to exaggerate any benefit beyond the
terms of the policy, but may be used only in a manner as fairly and accurately
describes the benefit.
(15) An
advertisement may not contain descriptions of a policy limitation, exclusion,
or reduction, worded or stated in a manner to imply that it is a benefit, for
example, describing a waiting period as a "benefit builder," or stating "even
preexisting conditions are covered after two years." Words and phrases used in
an advertisement to describe policy limitations, exclusions, and reductions
must accurately describe the negative features of such limitations, exclusions,
and reductions of the policy offered.
(16) No advertisement of a benefit, if
payment of the benefit is conditioned upon confinement in a hospital or similar
extended care facility, or at home, may use words or phrases such as "tax
free," "extra cash," "extra income," "extra pay," or similar words or phrases.
In those cases such words and phrases have the capacity, tendency, or effect of
misleading the public and cause the belief that the policy advertised enables a
profit to be made from being hospitalized. This section prohibits the
misleading use of the phrase "tax free," but it does not prohibit the use of
complete and accurate terminology explaining the Internal Revenue Service rules
applicable to the taxation of accident and sickness benefits. Prominence either
by caption, lead-in, boldface, or large type must not be given in any manner to
any statements relating to the tax status of such benefits.
(17) Except as permitted under §
21.109(a) of
this title (relating to Unlawful Inducement), an advertisement may not list
goods and services other than those set out in the policy as possible
benefits.
(18) A policy covering
only one disease or a list of specific diseases or accidents may not be
advertised so as to imply coverage beyond the terms of the policy. Synonymous
terms may not be used to refer to any disease to imply broader coverage than
that provided.
(19) An
advertisement that is an invitation to contract for a limited benefit policy, a
supplemental coverage policy, or a nonconventional coverage policy, as defined
in Chapter 3, Subchapter S of this title (relating to Minimum Standards and
Benefits and Readability for Individual Accident and Health Insurance
Policies), must clearly and conspicuously, in prominent type, state in language
identical to or substantially similar to whichever of the following is
applicable: "This is a limited benefit policy," "This is a cancer-only policy,"
"This is a supplemental policy," or "This is an automobile-accident-only
policy." The insurer or agent must use the foregoing statement to clearly
advise the public of the nature of the policy.
(e) Exceptions, reductions, and limitations.
(1) If a policy contains a waiting,
elimination, probationary, or similar time period between the effective date of
the policy and the effective date of coverage under the policy, or a time
period between the date a loss occurs and the date benefits begin to accrue for
such loss, an invitation to contract must disclose the existence of such
periods.
(2) An advertisement may
not use the words "only," "just," "merely," "minimum," or similar words or
phrases to unfairly describe the applicability of any exclusions, limitations,
or reductions, such as "This policy is subject to the following minimum
exclusions and reductions."
(f) Preexisting condition.
(1) An advertisement that states or implies
that preexisting conditions may apply must define the applicable preexisting
condition provisions.
(2) An
advertisement that is an invitation to contract must, in accurate terms,
disclose the extent to which a loss is not covered if the cause of the loss is
traceable to a condition existing before the effective date of the
policy.
(g) Disclosure of policy provisions relating to renewability, cancellability, and termination.
(1) An advertisement that is an invitation to
contract must disclose the provisions in respect of renewability,
cancellability, and termination, and each modification of benefits, covered
losses or premiums either because of age or for other reasons, in a manner that
does not minimize or render obscure the qualifying conditions.
(2) An advertisement for a policy stating or
implying that the policy is "guaranteed renewable" must:
(A) have a clear and conspicuous statement
that coverage may terminate at certain ages, if such is a fact; and
(B) include, in a prominent place, a
statement indicating that rates for the policy may change if the advertisement
suggests or implies that rates for the product will not change. Such statement
must generally identify the manner in which rates may change, such as by age,
by health status, by class, or through application of other general
criteria.
(3) No
advertisement may represent or imply that an insurance policy may be continued
in effect indefinitely or for any period of time, if the policy provides that
it may not be renewed or may be cancelled by the insurer, or terminated under
any circumstances over which the insured has no control, during the period of
time represented.
(4) The term
"noncancellable" or derivation thereof may not be used by an insurer or agent
to describe a policy if the insurer has a right to periodically, by individual
or class, revise rates or premiums.
(5) An invitation to contract must contain a
notice stating that the person to whom the policy is issued is permitted to
return the policy within 10 days (or more as stated in the policy) of its
delivery to that person and to have the premium paid refunded.
(h) Description of premiums, cost, and interest.
(1) Consideration paid or to be
paid for individual insurance, including policy fees, must be in all instances
described as premium, consideration, cost, or payments.
(2) Consideration paid or to be paid for
group insurance, including enrollment fees, dues, administrative fees,
membership fees, service fees, and other similar charges paid by the employees,
must be disclosed in an invitation to contract advertisement as a part of the
cost and consideration.
(3) An
advertisement may not offer a policy that uses a reduced initial premium rate
in a manner that overemphasizes the availability and the amount of the initial
reduced premium. If an insurer charges an initial premium that differs in
amount from the amount of the renewal premium payable, the advertisement may
not display the amount of the reduced initial premium more prominently than the
renewal premium.
(4) A reduced
initial or first-year premium may not be described by an insurer or agent as
constituting free insurance for a period of time.
(5) An advertisement of an insurance product
may not imply that it is "a low-cost plan" or use other similar words or
phrases without a substantial present or past cost record for the policy
advertised or similar policy, demonstrating a composite of lower production,
administrative, and claim cost resulting in a low premium rate to the
public.
(6) The words "deposits,"
"savings," "investment," and other phrases used to describe premiums may not be
used by an insurer or agent to hide or untruthfully minimize the cost of the
hazards insured against.
(7) An
insurer or agent may not make a billing of a premium for increased coverage or
include the cost of increased coverage in the premium for which a billing is
made without first disclosing the premium and details of the increased coverage
and obtaining the consent of the insured to such increase in coverage. This
does not apply to policies that contain provisions providing for automatic
increases in benefits or increases in coverages required by law.
(8) If the cost of home collection results in
a higher premium an advertisement must state that fact.
(i) Dividends.
(1) An advertisement may not use or describe
dividends in a manner that is misleading or has the capacity or tendency to
mislead.
(2) An advertisement may
not state or imply that the payment or amount of dividends is guaranteed. If
dividends are illustrated, the dividends must be based on the insurer's current
dividend scale and the illustration must contain a statement to the effect that
the dividends are not to be construed as guarantees or estimates of dividends
to be paid in the future.
(3) An
insurer or agent may not, as an inducement to purchase insurance, circulate,
publish, or otherwise exhibit to any person who is an insured, or prospective
insured, any form of director resolution, stockholders resolution, or form of
company action stating or implying the action an insurer will take on a
declaration of dividend or other matter in the future if the insurer, its
directors, or its stockholders are not bound to take the action stated or
implied, or if the insurer does not presently have the earnings or other funds
or assets to make the payments, or to complete the transaction in accordance
with the appropriate statutes.
(j) Compliance with statutes or rules as grounds for changing policy. In consideration of the comprehensive content of this division and, among other reasons, the division being applicable to substantially all insurers, an insurer or agent may not, particularly if used as a "twisting" device, inform any policyholder or prospective policyholder that an insurer or agent was required to change a policy or contract form or related material to comply with the provisions of this division or other rules or statutes.
(k) Deception or deceptive method as to introductory, initial, or special offers.
(1) An advertisement of a particular policy
may not state or imply that prospective policyholders become group or
quasi-group members that enjoy special rates or underwriting privileges
ordinarily associated with group insurance as recognized in the industry unless
such is the fact.
(2) If an insured
or prospective insured is provided a policy or coverage of insurance and the
first premium has not been paid, or an application has not been returned to the
insurer or its agents or representatives, the insurer, its agents, or
representatives may not make any billing or attempt to collect a premium on
such policy until an application or acknowledgment of acceptance is received.
If coverage is issued before acceptance, it must be accompanied by a written
statement describing it as follows:
(A) giving
the facts concerning the delivery of the policy and whether or not the policy
was requested by the insured;
(B)
stating that the insured is under no obligation to pay the insurer if the
insured does not want to continue or initiate the coverage; and
(C) clearly stating when coverage will be
effective.
(3) An
advertisement may not state or imply that a policy or combination of policies
is an introductory, initial, special, or limited offer and that applicants will
receive advantages by accepting the offer or that the advantages will not be
available at a later date unless it is a fact. An advertisement may not contain
phrases describing an enrollment period as "special," "limited," or similar
words or phrases if the insurer uses these enrollment periods as the usual
method of advertising insurance.
(A) An
enrollment period during which "a particular insurance product" may be
purchased may not be offered within this state unless there has been a lapse of
not less than three months between the close of the immediately preceding
enrollment period for the same product and the opening of the new enrollment
period. The advertisement must indicate the date by which the applicant must
mail the application. The date may not be less than 10 days and not more than
40 days from the date that the enrollment period is advertised for the first
time. (It is emphasized that this section is applicable to all advertisements
as defined in §
21.102(1) of
this title (relating to Scope)). This subparagraph is inapplicable to
solicitation of employees or members of a particular group, except that this
subparagraph does apply to the solicitation of members of an association group
that otherwise would be eligible under specific provisions of the Insurance
Code for group, blanket, or franchise insurance. This section applies to all
affiliated companies under common management or control. The phrase "a
particular insurance product" is used here to describe an insurance policy that
provides substantially different benefits than those contained in any other
policy. Different terms of renewability, an increase or decrease in the dollar
amounts of benefits, or an increase or decrease in any elimination period or
waiting period from those available during an enrollment period for another
policy are not sufficient to constitute the product being offered as a
different product eligible for concurrent or overlapping enrollment
periods.
(B) There may be no
statement or implication to the effect that only a specific number of policies
will be sold, or that a time is fixed for the discontinuance of the sale of the
particular policy advertised because of special advantages available in the
policy.
(C) An invitation to
contract Medicare supplement advertisement must describe complete information
regarding all available "open enrollment" opportunities or prominently disclose
a means of obtaining complete information regarding such
opportunities.
(l) Acknowledgment of nonduplication; notice to consumer.
(1) Acknowledgment of
nonduplication; notice to consumer.
(A)
Acknowledgment of nonduplication--The document that contains and is limited to
the language set forth in item (6) of Figure: 28 TAC §
21.113(l)(5).
(B) Duplication--Policies of the same
coverage type according to minimum standard classifications outlined in Chapter
3, Subchapter S and Subchapter Y of this title (relating to Standards for
Long-Term Care Insurance, Non-Partnership and Partnership Long-Term Care
Insurance Coverage Under Individual and Group Policies and Annuity Contracts,
and Life Insurance Policies That Provide Long-Term Care Benefits Within the
Policy). For example, two cancer insurance policies or two long-term care
policies would be duplicative. Duplication is also present when two policy
coverages overlap to the extent that a reasonable person would not consider the
ownership of two such policies to be cost efficient in light of the consumer's
needs and income level. Group health coverage obtained through an
employer-sponsored plan, conversion from a group employer-sponsored health
plan, short-term travel accident coverage, short-term nonrenewable coverage,
Medicare risk contracts, and retired-employee group plans will not be
considered duplication of other coverage.
(C) Notice to consumer--The document that
contains and is limited to the language set forth in item (7) of Figure: 28 TAC
§
21.113(l)(5).
(2) All insurers, other than
direct response insurers, or their agents or other intermediaries, must obtain
an acknowledgment of nonduplication with all applications for health insurance
sold to an individual who is 65 years of age or older, other than group health
coverage obtained through an employer-sponsored plan, conversion from a group
employer-sponsored health plan, short-term travel accident coverage, short-term
nonrenewable coverage, Medicare risk contracts, and retired-employee group
plans. This acknowledgment must be obtained at the same time as the application
and must be submitted to the insurer with the application. One copy of the
acknowledgment must be left with the insured and one copy kept on file with the
company. The form of the acknowledgment or notice must be printed on a separate
piece of paper and must contain the specific language and must be in the format
set forth in item (6) of Figure: 28 TAC §
21.113(l)(5).
(3) To obtain this acknowledgment, all
insurers or their agents or other intermediaries must offer to examine all
health insurance policies and health care coverage owned by a prospective
insured and advise the insured as to whether the purchase of the proposed
policy will result in any duplication of benefits.
(4) Direct response insurers that market to
the consumer without agents or other intermediaries are exempt from the
requirement to deliver the acknowledgment contained in item (6) of Figure: 28
TAC §
21.113(l)(5), but
must deliver the notice to consumers set forth in item (7) of Figure: 28 TAC
§
21.113(l)(5).
(5) Failure to comply with paragraphs (1) -
(4) of this subsection is an unfair business practice as defined by Insurance
Code Chapter 541, concerning Unfair Methods of Competition and Unfair or
Deceptive Acts or Practices.
Disclaimer: These regulations may not be the most recent version. Texas may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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